British Steel

Chris McDonald Excerpts

Tuesday 22nd April 2025 Commons Chamber

[Sarah Jones]

I hope the hon. Gentleman understands that the interventions that we made in this case were different for a number of reasons. When we were in Opposition, we worked with Tata to try to get it to change its plans, but we were unsuccessful. When we came into Government, we improved the deal that the previous Government had negotiated and we improved the redundancy offer. We got Tata to commit to invest in assets and free up land for other things, and we got it to provide a package of measures to improve that situation. The hon. Gentleman is right that that package meant the closure of the blast furnaces and the building of an electric arc furnace, with the closure happening before the electric arc furnace arrived, and because of the way that electric arc furnaces work, they are more efficient and need fewer people. We have been working really hard through the transformation board, led by the Secretary of State for Wales and the Welsh Government, to ensure that everybody has a significant package of support to try to ensure they transition to other jobs. That work is ongoing and progressing well, and we will continue to focus on it.

The two situations were fundamentally different. In Scunthorpe, British Steel was in the middle of a consultation on potential redundancies, and it failed to secure the materials to keep the blast furnaces going, which would have completely broken what British Steel should have been doing during that consultation. We could not allow that to happen, those blast furnaces to close and thousands of people to be suddenly made redundant, which is why we intervened in the way we did.

[Chris McDonald (Stockton North) (Lab)]

I thank my hon. Friend for her statement and for her action on British Steel. I extend my thanks to the officials in her Department, who I know have worked tirelessly in support of our Ministers to secure a future for the business. The Government’s plan for change has changed the lives of steelworkers in Scunthorpe and Teesside. People I work with, and their families, will feel a sense of relief—I feel a sense of relief. Ultimately, it is the customers of British Steel who will pay the wages of those workers in the future. In one of the future updates that the Minister has promised, can we cover the product and market development for British Steel, and how British Steel can better penetrate the UK market and increase its market share for domestic production?

[Sarah Jones]

I thank my hon. Friend for his work and for the support that he has provided to me, officials and others because of his expertise in this space. He is right to thank staff; they have worked unbelievably hard, and I am very grateful for what they have done. He is also right to talk about how we ensure that the product market develops in the way that we want it to. We are looking at how we increase demand in the UK, as well as at procurement and other issues, so that we are not just trying to save our existing provision, but to expand our provision so that the steel industry can start to grow, instead of halving as it has done over the past 10 years under the Tories.

Steel Industry (Special Measures) Bill

Chris McDonald Excerpts

2nd reading
Saturday 12th April 2025 Commons Chamber

[Chris McDonald (Stockton North) (Lab)]

In 1976, a group of steelworkers emerged from the Templeborough steelworks following a night shift. At the time, Temple-borough was the largest electric arc steelmaking plant in the world. Those steelworkers had just done something rather spectacular: they had broken a shift record. They were surprised to find a letter from the Prime Minister, Jim Callaghan, congratulating them on their contribution to the national effort. After 48 years, it is marvellous that we finally have a Prime Minister who is prioritising the steel industry once again.

I know what it is like to emerge bleary-eyed from a night shift on a steelworks. As much as we are emotionally attached to our steelworks, the past analogies are not entirely helpful here. There is too much of a narrative in this country that steel is a sunset industry, when in fact it is not only essential, but advanced. Perhaps this is the time for me to direct Members to my entry in the Register of Members’ Financial Interests, as the former chief executive of the UK’s national steel innovation centre.

A lot of that innovation is embedded in our facility in Scunthorpe, from advanced high-speed rail from the rail mill to rods that are drawn down to wire the thickness of a human hair, produced to pharmaceutical levels of precision. The beam mill in Teesside is one of a handful of plants capable of producing large-scale beams that have been used to build buildings from Hong Kong through to the west coast of the USA. The Skinningrove works produces the tines for yellow goods for Caterpillar, which move directly into that factory. I am sure that all Members agree on how vital those plants and facilities are, but they may be unaware that two thirds of the steels we produce today did not exist 15 years ago, such is the level of continuous innovation in the steel industry.

Everything that we have is made either from or with steel. Our steel industry has declined so significantly over the past 14 years that just last week, when I went to the constituency adjacent to mine to visit the Hartlepool pipe mill, which makes the pipes for the carbon capture and storage network in which this Government have invested £4 billion, I saw that stamped on the plates of steel was the word “Voestalpine”. An Austrian steel producer that sits in the foothills of the Alps is able to produce plate steel more competitively than those in the UK, while we have a plate mill in Scotland that is practically idle—the slabs for that plate mill would have been produced in the Scunthorpe steelworks.

I welcome the legislation today as an opportunity for us to take back control of our steel industry and deal with the chaotic fragmentation of the industry that occurred over the past 14 years. I believe that the UK can be just as competitive as steel companies in Austria, Germany, France, Spain or the Netherlands, which are, in fact, the biggest importers of steel to the UK.

[Michelle Scrogham (Barrow and Furness) (Lab)]

Will my hon. Friend give way?

[Chris McDonald]

I am sorry; given the shortage of time, I will not.

I also believe that we can be at least as good as the steel industry in Belgium, which is now larger than the steel industry in the UK. Clearly, there was a lack of ambition on the part of the previous Government. They did not believe that our steel industry could be as competitive as Belgium’s.

[Julia Lopez (Hornchurch and Upminster) (Con)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Chris McDonald]

I am sorry, but I am not going to give way, simply because of the lack of time.

It is important to correct the record on a number of earlier comments. The hon. Member for Boston and Skegness (Richard Tice) and others referred to the coal from the west Cumbria mine, but I must inform the House that the management of British Steel has ruled that coal out on the grounds of quality. The sulphur levels are too high.

[Richard Tice]

rose—

[Chris McDonald]

I would be quite happy to talk to the hon. Gentleman about steel desulphurisation in the Tea Room later, if he would care to join me. I also completely refute his comment about bringing in global expertise—we have the expertise in the UK to run steel companies effectively. Again, I would be happy to introduce him to people who could do that, if he wishes to know.

It is important to remember that the steel market globally is not a free market, which is why Governments work together. The US Government use tariffs and blocked a merger between Nippon Steel and U.S. Steel. The French Government traditionally use procurement; the German Government subside their steel industry with energy prices; the Chinese Government give cash. It is really important to recognise that steel companies do not compete in a free market, and that if we ask our steel companies to do that, we are asking them to compete with national Governments overseas and letting those national Governments set our steel and industrial policies, and, fundamentally, our defence policy. I think that is unacceptable. We need to recognise that the corporate interest of a company is not the same as the national interest of the UK. The Secretary of State has recognised that and shown real leadership.

I want to reserve my last remarks for the steelworkers in Scunthorpe. I worked in Scunthorpe for a time, both at the ironworks and at the steelworks. To the steelworkers in Scunthorpe, I say: I know exactly the pain that you are going through. I am sure that they will be relieved by the words of the Secretary of State.

We all think fondly of the four blast furnaces in Scunthorpe—the four queens: Bessie, Vicky, Mary and Annie—but ultimately, I think we all recognise that their time has come. While they will be nursed into their ultimate retirement, we look forward to regenerating the steel industry in Scunthorpe and around the UK with the most modern, most efficient and most high-productive steel plants. Just as a past Labour Government did when they nationalised the steel industry for the second time in 1967—it was so good we nationalised it twice—this time, we can hopefully work with the industry to create a world-leading steel industry for the future.

Budget Resolutions

Chris McDonald Excerpts

Wednesday 6th November 2024 Commons Chamber

[Chris McDonald (Stockton North) (Lab)]

Several of the previous speakers, including the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst), for East Wiltshire (Danny Kruger) and for Witney (Charlie Maynard), expressed concerns about growth and productivity and I hope to draw on my previous experience working in industry to set their minds at rest, but we first need to acknowledge the dire starting point and the damage done both to our economy and to business confidence by the last Government.

I know from my time spent in industry that over the last decade and a half our country has lost out in the race for international investment from a combination of political uncertainty and a long-standing indifference to industrial policy. I listened carefully to the words of the hon. Member for Great Yarmouth (Rupert Lowe) and I think he must have read a different Budget from me. The Budget I read committed us to public sector investment of over £100 billion over five years, which along with our modern industrial strategy sets the scale of the Government’s ambition for increasing prosperity and security across the whole of our country.

Several Members, including the hon. Members for Wimbledon (Mr Kohler), for Tunbridge Wells (Mike Martin) and for Didcot and Wantage (Olly Glover), mentioned small businesses. These are the very businesses which stand to benefit from our industrial strategy as our new approach to industry and manufacturing sees the private sector crowding in investment, producing well-paid jobs and exports that will support our small businesses in supply chains. This will also reverse the tide of deindustrialisation, a frankly bizarre policy of inaction enacted by Conservative Governments over many years that has left much of our industry, including steel, chemicals and ceramics, mentioned by my hon. Friend the Member for Stoke-on-Trent North (David Williams), at a serious disadvantage.

It seems clear that to grow our economy we need to boost productivity and simply build more factories, but I know as an advocate of industrial strategy that this position is not a settled one, particularly in the party opposite. That is in big contrast to the collaborative approach of this Government, who work pragmatically with business leaders. We have heard some warm words from Conservatives about industrial strategy, including from Opposition Front Benchers, but they perhaps have not had time to consult with their new leader, the right hon. Member for North West Essex (Mrs Badenoch), who has described such policies as part of the law of diminishing returns.

Having seen my right hon. Friend the Secretary of State for Business and Trade secure £63 billion of private sector investment, we can be sure, to borrow a metaphor from the right hon. Member for South West Wiltshire (Dr Murrison), that had their goose not been cooked at the last election, returns would most certainly have been the diminished.

This Budget will be of benefit to my constituents in Stockton, Billingham and Norton who value well-paid industrial and manufacturing sector jobs. I can understand the confusion of the right hon. Member for Beverley and Holderness (Graham Stuart)—he is not used to a Government who deliver on their manifesto—but this Government are determined to do that. We will release the finances required to restore the public services that the people of Britain deserve and only a Labour Government can deliver.

Steel Industry

Chris McDonald Excerpts

Wednesday 16th October 2024 Westminster Hall

[Chris McDonald (Stockton North) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mrs Harris, and I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing the debate. As many hon. Members will know, I have a background in the steel industry, so, rather than recite all of my interests, I simply refer people to my entry in the Register of Members’ Financial Interests.

I listened very carefully to the speech from the hon. Member for Boston and Skegness. There were a few points of difference, but, actually, there was much on which I agreed, so I look forward to him and his colleagues coming forward and supporting the Government’s steel strategy in due course.

Turning to the position in which we find ourselves in the steel industry, the Government have an unenviable task as a result of the legacy that we were left by the previous Government. I listened when the hon. Member for Brigg and Immingham (Martin Vickers) talked about the changes to tariffs made by the previous Government. They did make those changes, but they stuck rigidly to a suite of policies that denied the possibility of private sector capital investment coming into the UK’s steel industry by making it unviable. I know that well from the international investors I worked with in the industry. They were very keen to invest in the UK, but we could never get an appropriate rate of return as a direct result of policies pursued by that Government.

The Conservative Government knew that well; they knew it when the Redcar blast furnace closed in 2015 and when they stood back and let it fail for the want of the purchase of some coal. At the time, it was the most productive and efficient blast furnace in Europe. The hon. Member for Brigg and Immingham mentioned Scunthorpe; prior to 2020, the Conservative Government poured £1 billion into Scunthorpe but did not invest any of that money in transitioning to new technology that would have actually created a great future for people in Scunthorpe, and a return for the taxpayer, too. Instead, they sold the plant off cheaply.

Therefore, I do not envy the position of my hon. and right hon. colleagues in the Department for Business and Trade, who are wrestling with this legacy. Essentially, they are putting out the fires of the previous Government, and we will see, when the steel strategy has been brought forward, how we can create a bright future for the industry. We need to do that, and I support the calls to do it, but I think that the challenge is not actually about adherence to net zero; it is about adherence to a different ideology, which has been to assume that the steel industry operates in a free market and that we can treat it as such. It does not. Other countries around the world support their steel industries, so we need to create a level playing field for investment in our steel industry, too. If we do that then we can attract billions of pounds of private sector investment into our industry, as countries such as Austria, Sweden, Germany, France and so on do.

Over the past 10 years we have seen the UK steel industry collapse to the same size as Belgium’s. Surely the UK should have the ambition to at least be as good as Belgium and have a steel industry that can serve us as well as the Belgian steel industry serves its country. Of course, we can do that to compete globally and to create the products that we need for our green transition. The previous Government knew that quite well: a report on confidence and capabilities, which I co-authored, can be found on the Government website from 2017. It identified gaps in plate steels for offshore wind, seamless tubes for nuclear power and other areas as well. The previous Government made no effort to fill those gaps because, of course, they turned their back on private sector investment.

It is important that the steel strategy is brought forward in a way that will attract private sector investment and enable us to accelerate the green transition of our steel industry. Here I come to the point of difference with Opposition Members: the green transition is not an ideology, it is an economic imperative. We need to move away from blast furnaces because they are unproductive compared with the latest steel technologies. Steel plants operating electric arc furnaces are five times more productive than those operating blast furnaces.

[Lee Anderson]

indicated dissent.

[Chris McDonald]

The hon. Member chunters about it, but the most productive steel plant in the world is based in the USA. It is entirely privately funded and produces the same quality of steel as Port Talbot at the same quantity with one fifth of the workforce, because it is automated and it uses electric arc furnaces. If we get energy prices right, we can make that investment here and we can produce those steels too.

The UK is the second largest exporter of scrap in the world. That is a valuable natural resource that we could use in the UK, but we do need primary steelmaking and we need it to use the most efficient technologies. I am afraid, for those people who adhere to blast furnace technology, that that is not the blast furnace. I look forward to my hon. Friend the Minister bringing forward the steel strategy, and to supporting it and debating it further. I look forward to a bright future for steel in the UK.

UK Steel Manufacturing

Chris McDonald Excerpts

Thursday 5th September 2024 Commons Chamber

[Sarah Jones]

I welcome the right hon. Member for Croydon South (Chris Philp) to his place.

As I have made clear, we have been landed with an inheritance in which steel has declined by 40% and we are in very late-stage negotiations in Scunthorpe and Port Talbot. We are dealing with the consequences of that, which the previous Government failed to do. We will be putting a £2.5 billion investment into steel, and we are working at pace looking at DRI, which produces virgin steel, and at other options. We are looking at how we can introduce competition and new entrants into the market. We will work a lot faster and harder than the previous Government, and we will ensure that the steel industry thrives.

[Chris McDonald (Stockton North) (Lab)]

The global steel industry is investing many billions of pounds in new green technology that is more productive than current steel technology. Does my hon. Friend agree that our plan for steel will allow us to attract that private sector investment here, in great contrast to the previous Government’s policy that saw our steel industry decline to a size smaller than that of Belgium?

[Sarah Jones]

My hon. Friend, who is an expert in this area and with whom I have talked many times, will know that I agree with him. We need to introduce new entrants into the market, to stimulate the market and to encourage competition. The previous Government had a hands-off approach until an industry was about to collapse, and then they suddenly had to intervene with hundreds of thousands of pounds of taxpayers’ money. That was completely the wrong approach. As it turns out, the hundreds of thousands of pounds of taxpayers’ money that the Government put aside for Port Talbot came out of their reserves, which they spent three times over and was not real money. This will be real money. We will develop a proper steel strategy, and I very much look forward to working with my hon. Friend on devising it.